Some Libra Backers Reportedly Spooked by Regulatory Scrutiny

Back in June, following months of rumors, Facebook officially unveiled plans for the cryptocurrency Libra. In that announcement it was revealed that, while Facebook was taking the lead on the project and would also be introducing the Calibra crypto wallet, there were several partners that had signed-up to support the token at launch. However since then Libra has drawn criticism from several regulators — and the heat may be getting to some supporters.

According to a report by Financial Times (via Gizmodo) at least two brands have expressed concerns about Libra’s regulatory reception and are considering withdrawing from the project. Additionally Business Insider reports that companies are worried about publically supporting Libra lest they draw negative attention to themselves. In fact they note that announced partners Uber, Mastercard, PayPal and others have shirked questions about whether they still backed Libra. Instead many of these brands seem content to let Facebook bear the brunt of the push back. That said, BI got two Libra Association members — Vodafone and Mercy Corps — on the record to comment on their continued support, with a spokesperson for the former saying, “Vodafone strongly believes in financial inclusion and so we remain committed to the Libra Association, helping it to fully address the concerns of lawmakers and regulatory authorities.”

When asked about the status of the Libra Association and its members, a Libra head of policy and communications Dante Disparte told BI, “The 28 organizations that intend to become the initial founding members are currently working together to draft a charter and establish the guiding principles. Once the charter is ratified, we will be in a better position to comment on specific membership commitments.” He added, “At this time, all of the initial 28 organizations are still participating in this process.”

To say that regulators and lawmakers have been skeptical of Libra since its announcement would be an understatement. In addition to Democratic members of the U.S. House of Representatives Committee on Financial Services asking Facebook to reconsider their plans, Trump-appointed Federal Reserve chairman Jerome Powell has also shared concern. For its part, Facebook says it intends to address all of these concerns and won’t launch the project until regulators are satisfied.

It seems likely that Libra’s problems will continue to get worse before they get better. Thus it’s understandable that the companies under pressure might want to lay low. At the same time, having partners cut and run could further imperil the project. All this begs the question, will Libra ever make it to market? We’ll have to wait and see.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Bilt Rewards Launches Travel Portal with Benefits for Cardholders

Last year, the startup Bilt made a splash when it announced a new service that would reward users for paying their rent. That premise was then expanded upon with the launch of the Bilt Mastercard, which is issued by Wells Fargo. Now, continuing to capitalize on both the hype of their product and the demand for travel, Bilt has debuted another new offering for customers. This week, Bilt Rewards announced...

Cash App Introduces Round-Up Investing Feature for Debit Card

Debit card customers looking to grow their investments gained a new, automated option today as Block Inc. (formerly Square Inc.) officially announced a new feature for its popular Cash App. Now, customers with the Cash App Cash Card can opt into Round Ups as a means of growing their investments. When this feature is toggled on, Cash App will round up debit card purchases to the nearest dollar and invest...

Marqeta Expands Credit Program with New APIs and More

A FinTech that specializes in creating credit card experiences is rolling out some new features. This week, Marqeta announced what it calls a "significant expansion" of its credit platform. This includes more than 40 new credit APIs that will further help clients craft and launch their own credit card products. Additionally, the company notes an updated intuitive dashboard. Using this platform, businesses can create unique card options that can not...